A closer examination of the current shortage of machinists in the
United States yields some interesting findings, especially when compared to a
similar reported shortfall in 1982.

You've
probably noticed we are still hearing these skill-shortage stories. There is a
common theme to these: The reporter almost always visits a small manufacturer
who says they can't find anyone to hire. Then they go on to say the problem is
that there is no one out there who can do the job, and the reason for that must
be that the schools are failing. This was the story line of 60 Minutes
(where I made a brief appearance) and another recent column by Tom Friedman in
the New York Times.

Because
these stories are inevitably about small manufacturing operations and virtually
always about jobs associated with machinist skills, I thought it might be
interesting to look into what is happening in that job market to understand
these complaints about not being able to hire. The employers, no doubt, have
some insights into the problem, but just as asking a job seeker why he or she
can't find a job may not always lead to the most objective answers, asking
employers why they cannot hire workers might not always lead to the most
objective responses either. Neither group is inclined to look at what they're
doing as a possible source of the problem.

Here's
what I found.

First,
the number of machinist jobs in the United States has declined quite a bit over
time, more than 20 percent in the past 20 years, while the overall number of
jobs in the economy has grown by 40 percent. Going forward, the Bureau of Labor
Statistics projects that growth in these jobs will be below the average for the
economy. This has been a declining field.

Second,
what has happened to wages? An obvious explanation as to why it might be
difficult to hire is that wages are not high enough. Just as a reminder from
Economics 101, if you can buy what you want were you to pay more for it, then that
means there is no shortage. The BLS calculates that the average pay for a
machinist in the United States now is just above $40,000. Not bad, depending on
your standards. What was it in the past? In 1982 -- also a recession year -- the
average annual pay for a machinist in 2012 dollars was $48,000. So in real
terms, the average pay for a machinist has fallen by 20 percent.

Third,
what's happened to skill requirements? Machinist jobs used to be seen as the
highest-skilled occupations in manufacturing. At the very least, machinists
needed to be able to use basic trigonometry and algebra, sometimes very basic
calculus. High-school math, but still math. We hear about how manufacturing
jobs are different now, how they require a lot more skill and especially more
math than they did before. Is that true for machinists?

I spent
some time searching websites where machinists talk about their jobs, especially
how they have changed over time, and here is what they say: The big change is
the rise of computer-assisted machining tools. Among other things, these tools
will do all the math calculations that machinists in the past had to do on
their own. Some of the machinists say that it is still useful to know how to do
those calculations, while others say there is no real need to know. Yet none I
read say that it is better to do them yourself than to let the machine do it. (If
this sounds wrong to you, ask yourself how often you use paper and pencil to
add up numbers rather than use a calculator, or even to check the calculator's
answers.) It is hard not to believe that the amount of math that the individual
machinist needs to perform has declined.

Are
there new requirements? Yes. Those that involve interacting with the
computer-based machines. Depending on the task and the choices made by employers
as to how to divide them between engineers and machinists, the new tasks may
require programming the machines, usually simple programming by IT standards,
or just operating the software, the way white-collar workers might use an Excel
spreadsheet.

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The simplest
explanation for any perceived difficulty in hiring machinists -- or hiring people
to become machinists -- is that it is just hard to attract people to a field
that is in relative decline, where wages are much less than they have been in
the past, and where the skills needed are useful in better-paying jobs.

At the
same time, we know that traditional employer/union-apprenticeship programs that
provided a path into machinist work have largely collapsed. That's got to be
part of the problem, as well.

Here is
something else I learned, from looking at 1982. A BLS study investigating
employer complaints about a shortage of machinists that year found no real
evidence of a skill shortage. The author, Neal Rosenthal, suggested that the
way employers will address any difficulty in hiring would be to do what they
have always done: raise their wages, train more new hires (he noted that formal
apprenticeships had declined) and invest in productivity-enhancing equipment
that reduced the need for machinists. Sounds like good advice now. All three
approaches have the advantage of being good for the economy and society.

Finally,
it has struck me how many of the complaints about not having anyone to hire
come from businesses that essentially have no HR function. There's no one there
with the skills to hire, to develop talent internally, or even to assess the
market to know what to pay.

Maybe
that's the real skill shortage.

Peter
Cappelli is the George W. Taylor Professor of Management and director of the
Center for Human Resources at The Wharton School. His latest
book is Why Good People Can't Get Jobs: The Skills Gap and What Companies
Can Do About It.